You’ll soon be able to monitor credit scores with your bank app: Monzo and RBS to allow customers to check for free
- RBS’s feature went live on Tuesday and Monzo’s will launch at the end of March
- It is likely a play to improve their banking apps and attract more customers
- Barclays charges £5 a month for being able to do this
Challenger bank Monzo and high street giant Royal Bank of Scotland will allow customers to check and monitor their credit score for free in their apps.
RBS’s feature went live on Tuesday with stablemate NatWest to follow in early March, while Monzo said it planned to introduce the feature to its customers at the end of next month.
It means customers will be able to check their likelihood of being accepted for credit cards, loans, phone contracts and mortgages without needing to visit a reference agency separately to find out.
Consumers are increasingly able to check their credit score for free on their phones. As well as Monzo and RBS, MoneySuperMarket launched a credit scoring app powered by TransUnion
However, those wanting a more detailed look at their full ‘financial CV’ will still likely need to pay a fee to one of the three major credit reference agencies, Equifax, Experian and TransUnion, rather than simply getting a snapshot.
Looking at your full report with Experian costs £14.99 a month and Equifax £7.95, though both offer 30-day trials.
Meanwhile you have a right to request a statutory credit report from an agency for free, though this excludes your score.
Monzo and RBS are just two of the latest financial firms which have partnered with the big three reference agencies to offer customers the option of checking their three digit credit score.
Barclays allows customers to check theirs in return for a £5 monthly fee, while comparison site MoneySuperMarket has developed its own credit monitor app.
However, this does not mean that banks are necessarily attempting to muscle in on the business model of the reference agencies, given that Monzo, MoneySuperMarket and RBS use data provided by TransUnion.
TransUnion’s David Firth insisted last November that credit reference agencies were not redundant in an age where financial data can be openly shared.
He says the partnerships between reference agencies and banks highlight one of the ways in which the agencies can take advantage of open banking.
Instead, it is likely a way of adding another mobile banking feature in the fight over customers becoming increasingly used to banking on smartphones, and becoming all-round money management apps rather than simply ones showing how much money is in your account.
Meanwhile, Monzo’s introduction of credit scoring may be well connected to its decision to launch personal loans to customers last August, and the fact it expected to lose £3.1million on an earlier batch of loans and overdrafts worth £19.2million.
Someone’s TransUnion credit score is numbered between 0 and 710, while Equifax rates you between 0 and 700 and Experian from 0 to 999.
This score determines not only whether an applicant will qualify for a credit card or loan but also whether they will get a lower or representative APR, or, if they’re applying for a balance transfer credit card, whether this transfer will give them a high enough credit limit to cover the balance they are moving over.
Customers of both Monzo and RBS will be able to check their score as many times as they wish with no impact on their score, with RBS’s score updating every 30 days.
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS
Santander’s 123 Lite Account will pay up to 3% cashback on household bills. There is a £1 monthly fee and you must log in to mobile or online banking regularly, deposit £500 per month and hold two direct debits to qualify.
NatWest’s Reward Silver Account offers a £175 switching incentive to new and existing customers as well as insurance cover for European travel. Customers can also earn rewards which can be redeemed as cash or gift cards.
Club Lloyds’s Current Account offers benefits such as cinema tickets, magazine subscriptions and dining cards to current account holders. There is no cost if you pay £1,500 each month, otherwise a £3 fee applies. Must hold two direct debits to earn monthly credit interest.
HSBC’s Advance Account offers £175 cash if you switch to it. The account comes with a £1,000 starting overdraft and 2.75% regular saver account. There is no monthly fee, however you must deposit £1,750 per month into the account.
Nationwide’s FlexDirect account comes with 5% interest on up to £2,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both perks last for a year.
